From Amazon to New Balance, consumer brand execs bring ‘outsider’ perspective to healthcare

boardroom with woman leading team meeting

Massachusetts-based health system Wellforce recently appointed its first ever chief consumer officer, tapping an executive from a well-known sneaker brand.

Christine Madigan joined the health system to lead marketing and consumer engagement, Wellforce announced in January. She comes from New Balance Athletics, where she led the global marketing and brand management organization. Madigan was attracted to what she termed the “challenger brand” because of its nimble innovation strategy and its mission to help people live healthier. “I can’t imagine a more purpose-driven culture than that,” she told Fierce Healthcare. 

“As a marketing veteran from consumer products, Christine understands the importance of envisioning and building services around consumer needs. She will be a great asset in improving and modernizing the way consumers engage with the health care industry,” David Storto, Wellforce’s executive vice president and chief strategy and growth officer, said in the announcement. 

The move comes amid a rising trend in healthcare: executives sourced from outside the industry, and in particular from consumer brands, to lead innovation strategies. Fierce Healthcare spoke to several, some of whom have been in their roles for years. They agree that while there are many transferrable skills, there is also an advantage to being an outsider. 

To Madigan, the core challenge remains the same business to business—understanding who the consumer is and the different ways they engage with one’s brand. 

Aaron Martin, chief digital officer at Providence St. Joseph Health, who joined the health system from Amazon in 2016, echoed Madigan. “Bringing the patient focus—what we called at Amazon ‘customer obsession’—to Providence was key,” he told Fierce Healthcare.

Society is bombarded by healthcare marketing messages, Madigan noted. She wants to “drive some simplicity into the process.” While the system is built to provide reactive, acute care, Madigan sees preventive care as just as important. And a crucial part of facilitating that is establishing not only awareness of but trust in a provider. “Every detail matters in what you communicate in an experience,” she said.

And for organizations that don’t innovate, “somebody else is going to disrupt us,” Martin said.

To drive innovation at scale, Martin sees a disciplined strategy as key. At Amazon, that looked like picking an area to impact and measuring the value of closing that gap. Applying that to Providence, Martin worked with the clinical team to discover patients in need of low-acuity care were going to other providers instead of to Providence. So Providence launched ExpressCare, offering virtual appointments to recapture those patients and establish continuity of care.

Like Madigan, Novant’s chief digital and transformation officer Angela Yochem, who has held chief information officer roles at Rent-A-Center and BDP International, believes passive care is not enough to eradicate health inequities. “We’ve optimized for fixing things,” she said of the healthcare system. “I’d like to see the healthcare industry become more engaged continually. We need to understand our patients beyond what their last condition is,” she added, referring to social determinants of health.

“In retail, we used to say that customers shouldn’t have to shop our merchandising organizational chart,” said Prat Vemana, Kaiser Permanente’s chief digital officer, who transitioned in 2019 from chief product and experience officer at The Home Depot. To streamline how patients navigate an already highly fragmented healthcare system, Kaiser starts with the patient and works backward when developing digital experiences. 

A challenge in healthcare, Vemana acknowledged, is the lag in data around health outcomes. Whereas in retail, results are immediately visible, healthcare is less straightforward. “We have to develop workarounds to get directional information while waiting to see the results,” he said. 

The transformation of the sector won’t happen without diversity of thought and experience, Yochem said. It’s less about hiring from a particular sector and more about hiring from all over. Those people will have seen the potential for consumer engagement and will be able to “apply what we know to be possible,” Yochem said. Without those outsider insights in the insular sector, “you create an echo chamber, because you respond to problems in the same way.” 

A Delta-driven decline in consumer confidence

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After a calmer start to the summer, the Delta variant is eroding consumer confidence as COVID-19 surges across many parts of the US once again. Using the latest data from Morning Consult’s Consumer Confidence Index, the graphic above shows the fluctuations in consumer confidence levels across the last year. 

The most recent COVID surge has caused a five-point drop in confidence in the past month and, with cases still rising, we expect this trend to continue into the fall. Notably, with renewed masking guidance and increasing reports of breakthrough infections, confidence has dropped more among fully vaccinated individuals than among the unvaccinated.

Consumers’ comfort levels aren’t only dropping when it comes to daily activities, like grocery shopping or dining at a restaurant, but also with respect to healthcare. A recent survey from Jarrard Phillips Cate & Hancock finds that while consumers feel safer visiting healthcare settings in August 2021 than they did back in January, more than a third of consumers report the current COVID situation is making them less likely to seek non-emergency care, and 44 percent say they are more likely to pursue virtual care alternatives. 

Health systems must be able to seamlessly “dial up” or “dial down” their virtual care capabilities in order to meet fluctuating consumer demand and avoid another wave of missed or deferred care.

Private equity rolls up veterinary practices, with predictable results

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Amazon.com: The Private Equity Playbook: Management's Guide to Working with Private  Equity (9781544513263): Coffey, Adam: Books

Given regulatory barriers and structural differences in practice, private equity firms have been slow to acquire and roll up physician practices and other care assets in other countries in the same way they’ve done here in the US. But according a fascinating piece in the Financial Times, investors have targeted a different healthcare segment, one ripe for the “efficiencies” that roll-ups can bring—small veterinary practices in the UK and Ireland.

British investment firm IVC bought up hundreds of small vet practices across the UK, only to be acquired itself by Swedish firm Evidensia, which is now the largest owner of veterinary care sites, with more than 1,500 across Europe. Vets describe the deals as too good to refuse: one who sold his practice to IVC said “he ‘almost fell off his chair’ on hearing how much it was offering. The vet, who requested anonymity, says IVC mistook his shock for hesitation—and increased its offer.” (Physician executives in the US, take note.) IVC claims that its model provides more flexible options, especially for female veterinarians seeking more work-life balance than offered by the typical “cottage” veterinary practice. 

But consumers have complained of decreased access to care as some local clinics have been shuttered as a result of roll-ups. Meanwhile prices, particularly for pet medications like painkillers or feline insulin, have risen as much as 40 percent—and vets aren’t given leeway to offer the discounts they previously extended to low-income customers. And with IVC attaining significant market share in some communities (for instance, owning 17 of 32 vet practices in Birmingham), questions have arisen about diminished competition and even price fixing. 

The playbook for private equity is consistent across human and animal healthcare: increase leverage, raise prices for care, and slash practice costs, all with little obvious value for consumers. It remains to be seen whether and how consumers will push back—either on behalf of their beloved pets, or for the sake of their own health.  

In need of more nuanced consumer segmentation

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As “consumerism” becomes an ever-greater focus of health system strategy, we’ve begun to field a number of questions from leaders looking to develop a better understanding of consumers in their market.

In particular, there’s a growing desire for more sophistication around consumer segmentation—understanding how preferences and behavior differ among various kinds of patients. 

Traditional segmentation has largely been marketing-driven, helping to target advertising and patient recruitment messages to key groups. For that, the old-school marketing segments were good enough: busy professionals, the worried well, the growing family, and so forth.

But as systems begin to develop product offerings (telemedicine or home-based services, for example) for target populations, those advertising-based segments need to be supplemented with a more advanced understanding of care consumption patterns over time. Segmentation needs to be dynamic, not static—how does a person move through life stages, and across care events, over time?

A single consumer might be in different segments depending on the type of care they need: if I have a new cancer diagnosis, that matters more than whether I’m a “busy professional”, and my relevant segment might be different still if I’m just looking for a quick virtual visit.

Layered on top of demographic and clinical segments is the additional complexity of payer category—am I a Medicare Advantage enrollee or do I have a high-deductible exchange plan? 

With consumers exercising ever greater choice over where, when, and how much care to receive, understanding the interplay of these different kinds of segments is fast becoming a key skill for health systems—one that many don’t currently have.  

Humana partners with DispatchHealth for hospital at home

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Humana, the nation’s second-largest Medicare Advantage (MA) insurer, is pushing further into home-based care, partnering with Denver-based startup DispatchHealth to offer its members—especially those with conditions like heart failure, chronic obstructive pulmonary disease, and chronic cellulitis—access to hospital-level care at home.

The service will initially be available in the Denver and Tacoma, WA markets, with plans to expand to Arizona, Nevada, and Texas across 2021. Humana members who meet hospital admission criteria will receive daily home visits from an on-call, dedicated DispatchHealth medical team, as well as 24/7 physician coverage enabled by remote monitoring and an emergency call button.

DispatchHealth will also coordinate other patient care and wraparound services in the home as needed, including pharmacy, imaging, physical therapy, durable medical equipment, and meal delivery. Dispatch’s earlier offerings centered around home-based, on-demand urgent and emergency care services, now available in at least 29 cities nationwide. 

Humana’s partnership with DispatchHealth could deliver a full care continuum of home-based services to its Medicare Advantage enrollees and has the potential to displace hospitals from at least a portion of acute care services

Post-COVID, it’s becoming increasingly clear that the nexus of care delivery has shifted even more rapidly to consumers’ homes—and traditional providers will need to rethink service strategies accordingly.